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That's backed up by comments made by Li, who appears to believe that the competition the auto industry faces from companies like Tesla, Google and Apple will result in just a handful of current vehicle makers surviving and prospering in this new era of autonomous and AFVs. "In order to succeed and seize the technology highland, one has to have friends, partners, and alliances and adapt a new way of thinking in terms of sharing and united strength", he said.

But in a speech to the CAR Institute automotive conference in Bochum, Germany earlier this month, Li skirted around the speculation, saying simply that Europe had "a very important role for the development of automotive brands under our leadership".

Ferdinand Dudenhoffer, a professor who runs an automotive research centre at the University of Duisburg-Essen, said many people in Germany were cautious about investments by Chinese companies. Volkswagen AG is owned by the Porsche-Piech billionaire clan with the government of Qatar counting as a major stakeholder, and BMW is owned by the wealthy billionaire Quandt-Klatten family.

Analyst Arndt Ellinghorst of Evercore ISI said: "We only believe that Geely would consider an investment of this magnitude if there was a more significant industrial opportunity from cooperation between Geely/Volvo and Mercedes".

Daimler and other automakers are scrambling to develop electric vehicles to comply with increasingly stringent emissions standards that will take effect in China and Europe in the coming years.

Mr Li changed tactics, and quietly amassed a stake of 9.69 per cent worth US$9 billion at Daimler's current share price. The company made regulatory disclosures after the close of markets on 23 February 2018.

German business media have for weeks reported Li and Geely's interest in Daimler. "It is the duty of investors to follow these and to check them".

"Daimler is an outstanding company with a first-class management".

"Daimler is pleased to announced that with Li Shufu it could win another long-term orientated shareholder", a spokesman for the Stuttgart-based group said.